Which of the Below Statements Is TRUE

question 34

Multiple Choice

Which of the below statements is TRUE?

• A) Loans that are backed by agencies of the federal government are referred to under the generic term of government loans and are guaranteed by the full faith and credit of the U.S. government.
• B) In contrast to government loans, there are loans that have no explicit guaranty from the federal government and referred to in the market as conventional loans.
• C) A conventional loan can be insured by a private mortgage insurer.
• D) For government loans and the loans guaranteed by Freddie Mac and Fannie Mae, there are no real limits on the loan balance.

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Definitions:

Degrees of Competition

The spectrum of market structures that varies from one extreme of perfect competition to the other of monopoly, including monopolistic competition and oligopoly in between.

Oligopoly

A market structure dominated by a small number of large companies, leading to limited competition.

Monopolistic Competition

A market structure featuring many firms selling products that are similar but not identical, allowing for competition despite product differentiation.

Homogeneous Oligopolist

A firm in a market structure where only a few sellers offer products or services that are essentially identical, leading to limited competition.